Daiwa upgraded XPeng (XPEV) to a Buy rating after having the electric vehicle stock slotted at Hold.
Analyst Kelvin Lau pointed to XPeng’s (XPEV) improving gross margin and competitiveness in the areas of robotaxis and humanoid robots.
Looking ahead, Lau and his team expect XPeng to sell 554,000 new cars in 2026, which is up from a previous estimate of 493,000. That tally includes the expectation for 1,000 robotaxis to be sold. XPeng’s (XPEV) gross margin rate is seen hitting 23% in 2026, due to the higher revenue mix of technical services. “Our 2026-27E EPS is 68-171% higher than the FactSet consensus, likely due to our more upbeat view on its gross margin,” highlighted Lau.
Daiwa assigned a price target of $29 to XPeng (XPEV) to represent 28% upside potential. Shares of XPeng (XPEV) were down 1.3% in premarket trading on Wednesday to $22.33.
XPeng (XPEV) Q3 earnings recap: Revenue increased 101.8% year-over-year to reach RMB20.38 billion ($2.86 billion) and was up 11.5% from the prior quarter. Vehicle sales revenue grew to RMB18.05 billion, up 105.3% year-over-year and 6.9% quarter-over-quarter, driven by new model launches. Notably, XPeng’s gross margin rate hit a record 20.1%, up from 15.3% last year and 17.3% in Q2. Vehicle margin was 13.1% for the quarter of 2025, compared with 8.6% for the same period a year ago. The margin improvement helped steer the company closer to profitability. XPeng (XPEV) delivered 116,007 vehicles during the quarter.